CLASSIFICATION: UNCLASSIFIED// ROUTINE R 011753Z DEC 23 MID120000677991U FM CNO WASHINGTON DC TO NAVADMIN INFO CNO WASHINGTON DC BT UNCLAS NAVADMIN 289/23 MSGID/GENADMIN/CNO WASHINGTON DC/N8/DECEMBER// SUBJ/UNITED STATES NAVY CONTRACT SERVICES GUIDANCE FOR FISCAL YEAR (FY) 2024// REF/A/DOC/DOD/24JUN21// REF/B/DOC/DON/08APR22// NARR/REF A IS DEPARTMENT OF DEFENSE INSTRUCTION 5000.74. REF B IS SECNAVINST 5000.2G ENCLOSURE (8). POC/ANGELA TENNYSON/CIV/OPNAV/LOC: WASHINGTON DC/TEL: 240-925-4245/EMAIL: ANGELA.L.TENNYSON.CIV@US.NAVY.MIL// POC/JOHN NORTH/CIV/USFF/LOC: NORFOLK, VA/TEL: 757-836-9508/EMAIL: JOHN.W.NORTH.CIV@US.NAVY.MIL// POC/KATHY ATOIGUE/CIV/UNIT: USPACFLT/LOC: PEARL HARBOR, HI/808-474- 6414/EMAIL: KATHY.R.ATOIGUE.CIV@US.NAVY.MIL// POC/FRANCIS TISAK/CIV/DASN(P)/LOC: WASHINGTON DC/TEL: 703-614-9636/EMAIL: FRANCIS.X.TISAK.CIV@US.NAVY.MIL// GENTEXT/REMARKS/1. Purpose. This NAVADMIN updates Service Requirements Review Board (SRRB) policy and provides SRRB guidance for the remainder of Fiscal Year (FY) 2024 and looking ahead to FY 2025. 2. Background. The Department of the Navy (DON) had approximately $57 billion contractual services obligations in FY 2023 which accounts for approximately 23% of the Navy's Total Obligation Authority. The acquisition of services is a Command responsibility. DON commanders are responsible for the appropriate, efficient, and effective acquisition of services in their organization. The Office of Secretary of Defense increased its interest in acquisition of services in June 2023 by creating a cross-functional Services Acquisition Executive Steering Committee (SAESC) at the senior leadership level as well as a Services Acquisition Working Group (SAWG) to facilitate communication and examine matters that come before the SAESC to include disciplines related to Services Acquisition, Comptroller, and Programming. In September 2023 the United States Government Accountability Office singled out the DON among the military departments for its ability to collectively prioritize service requirements, to aggregate SRRB data, to identify broader efficiencies, and to free up funding for higher priorities (GAO Report GAO-23-106123). a. The SRRB process shall be used to review, validate, and approve services requirements to accurately inform the budget and acquisition processes. In accordance with reference (a), contract service requirements shall be vetted through an SRRB process as early in the services acquisition process as practical, but before the development of an acquisition strategy and before a procurement request package is transferred over to a contracting officer for execution. b. Requirement reviews shall include, but not be limited by, the following considerations: (1) Mission Need. Explanation of the mission need for the requirement and the outcomes to be achieved from acquiring services. (2) Strategic Alignment. How the requirement for services supports the broader organizational mission. (3) Issues and Risks. Both government and contractor issues and risks impacting the successful execution of fulfilling the requirement. (4) Workforce Analysis. An analysis of the decision to insource or outsource, including any past decisions and why the requirement cannot be fulfilled with military or civilian personnel. The analysis shall take into consideration OPNAVINST 1000.16L, Change 3 or succeeding document, Navy Total Force Manpower Policies and Procedures." (5) Relationship to Other Requirements. How the requirement for services impacts other requirements of the DoD Component (positively or negatively). For information technology (IT) services, ensure requirements are consistent with enterprise IT strategies. (6) Prioritization. A determination as to whether the requirement for services is a lower-priority requirement that can be reduced or eliminated with savings transferred to higher-priority objectives or mission requirements. (7) Contract Functions. A review and identification of contract and work functions that may be prohibited or require heightened management attention, including, but not limited to inherently governmental Services, personal services, closely associated with inherently governmental functions and critical functions. (8) Metrics/Tripwires. Performance management metrics and tripwires shall be considered to the maximum extent practicable during the SRRB review and approval process. (9) Product and Service Code (PSC) and Object Class Code (OCC). Correct PSCs and OCCs are required and reported at the Contract Line Item Number level. PSCs and OCCs are essential for spend and budget analysis, and as such, all personnel shall ensure the accuracy of PSCs and OCCs in both contracting and accounting systems. 3. Services Defined. Service contracts are defined in the Federal Acquisition Regulation (FAR) Subpart 37.101 as a "contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply." All services requirements and service contracts with an estimated cumulative value of the command's threshold or at $1 million or above (including pre-priced contract options) require SRRBs with the following exceptions: a. Services listed in Subpart 37.502 of the FAR and services obtained under contracts with a total value of less than the command's threshold or less than $1 million. b. Services in direct support of a contingency, humanitarian, or peacekeeping operation as defined in FAR Subpart 2.101. This exemption shall apply to the response and initial deployment phase, but shall terminate as soon as practical based on conditions on the ground and a determination by the decision authority. c. Services that are required to respond to and recover from an emergency or disaster directly supporting an emergency declaration or a major disaster declaration by the President. This exemption shall apply to the response and initial recovery phase, but shall terminate as soon as practical during the sustainment phase managing reconstruction and recovery efforts based on conditions on the ground and a determination by the decision authority. d. Research and development (R&D) services (Product and Service Code (PSC) Category "A"). e. Services from DoD Federally Funded Research and Development Centers (FFRDCs), which are acquired in accordance with the management structure described in FAR Subpart 35.017 and DoDI 5000.77 and from DoD University Affiliated Research Centers (UARCs), which are acquired in accordance with the management structure described in the DoD UARC Management Plan. f. Construction services (PSC Category "Y") and Architecture and Engineering - Construction (PSC Category "C1"). g. Services that are managed and reviewed as part of defense acquisition programs under other Adaptive Acquisition Framework pathways (see https :(slash)(slash)aaf.dau.edu for additional information on the pathways). Reference (a) and SRRB requirements may apply to services in the operations and support phase of these programs at the discretion of the Milestone Decision Authority. h. Utilities services (PSC Category "S1"). i. Commercial subscription services including database and information systems, periodicals, publications and educational course subscriptions. j. As a point of clarification only, SRRBs are not required for services requirements funded fifty percent or more by Foreign Military Sales. Navy Marine Corps Intranet (NMCI) services or Global Installation Contract (GIC) services). 4. SRRB Requirements a. The SRRB is a requirement validation process; SRRB approval does not constitute a promise to fund or a promise to award a contract. Final decisions related to contract execution, such as contract type, small business participation, and the extent of competition are reserved for contracting officers. b. All headquarters staff and subordinate commands are required to conduct SRRBs as a means of reviewing, validating, approving, and prioritizing all applicable funded and unfunded services requirements with an estimated total cumulative value at $1 million or above. Commands may have a lower threshold than $1 million for SRRB review processes. This includes both base contracts and resulting task orders. However, execution of pre- priced options do not require additional SRRB approval. c. The requiring activity is responsible for submitting service requirements to the SRRB regardless of the source of funding. d. Activities receiving funds from another command shall rely on the originating command's SRRB validation; an additional SRRB review is not required. e. SRRBs shall be cross-functional with representation from the requiring, contracting, and financial management communities as they are available, and chaired by a Flag Officer, General Officer, or Senior Executive Service Member (FO/GO/SES). Contractual services requirements at or above $1 million (or the Command threshold, whichever is lower) shall be approved via a SRRB chaired by a FO/GO/SES, or, for activities that do not have a FO/GO/SES member assigned, the first FO, GO, or SES member in the requiring activity's chain of command. Chairmanship of SRRBs for contractual services requirements below $10 million may be delegated in writing to the O-6 or GS-15 level. 5. SRRB Internal Controls. a. SRRB approvals shall be documented by the SRRB Chair. Shall the SRRB Chair require meeting minutes, action items, or recommendations, these shall also be documented as directed by the SRRB Chair. Such documents shall also be made available for review during Services Acquisition Reviews and Training (SART) visits conducted by staff from the Office of the Deputy Assistant Secretary of the Navy for Procurement (DASN(P)), which is responsible for DON oversight of SRRB processes. b. All Command staff and subordinate commands shall identify, document, and implement appropriate internal control processes (usually a SRRB identification number) to ensure that funding documents for contract service requirements are not submitted to contracting officers without SRRB validation. c. Command Contractual Services Managers (CSMs) facilitate and help oversee the processes for Services Acquisition including SRRBs. CSMs act as an action officer on all matters related to contractual services within their organization. At the direction of the SRRB Chair, CSMs help develop and facilitate SRRB policies and procedures, document SRRB results, and conduct oversight to ensure compliance. d. SRRB results shall be submitted annually by 30 October to DASN(P) Senior Services Manager IAW DASN(P) format. This calls for Echelon III and below to submit their results to Echelon II NLT 15 October to allow adequate time to meet the DASN(P) annual 30 October deadline. e. IAW Command policy and no later than FY 2024, the SRRB Chair shall certify that each contractual services requirement validated through the SRRB process is in compliance with the standard guidelines found in the DoD Handbook of Contract Function Checklists for Services Acquisition (May 2018 or successor document), that all appropriate statutory risk mitigation efforts have been made, and that the purchase request does not include requirements formerly performed by DoD civilian employees. f. It is understood that the SRRB Chair is approving and certifying to the contractual services requirement as the facts and analysis are known at the time of SRRB review. g. Rather than certifying each individual requirement, SRRB Chairs may make a single certification for all SRRB contractual actions which have been reviewed and approved during a single SRRB meeting or event. This may be done through various ways, such as a cover page to SRRB meeting notes, quad charts, or other SRRB approval documents. 6. Category Management. Commands shall employ management actions that align with Category Management principles. Category Management refers to the business practice of buying common goods and services as an enterprise to help the DON eliminate redundancies, increase efficiency, and deliver more value and savings from the government's acquisition programs. It requires participation during all phases of the acquisition process, and includes collection, sharing and analysis of data within and across commands, employing cross-departmental teams, and identification and distribution of best practices and lessons learned. The DON Category Management Program Office at NAVSUP, working under the direction of DASN(P), is available to assist with Command Category Management initiatives. They can be contacted via email at usn.mechanicsburg.navsuphqmech.mbx.doncmpo- solutions@us.navy.mil. 7. Expect additional or updated guidance for FY 2025 SRRBs. 8. Released by direction Neil W. T. Hogg, SES, Assistant DCNO for Integration of Capabilities and Resources (N8B).// BT #0001 NNNN CLASSIFICATION: UNCLASSIFIED//